DQ1 SWOT Analysis Assignment Example | Topics and Well Written Essays - 250 words

DQ1 SWOT Analysis - Assignment Example A second strength of talent management is that it can help enhance the skills and capabilities of the employees. Companies that have solid talent management plans tend to have higher employee retention rates. Using talent management can also enhance the human capital of a firm. The human capital of a firm is its most valuable asset (Investopedia, 2013). A weakness of talent management is that is costs money to implement an adequate talent management plan. Companies spend money on training and development, seminars, and educational opportunities to effectively implement an adequate talent management plan. If a company is not able to identify the skills gap of the workforce the training initiatives of the firm can become ineffective. An opportunity associated with talent management is the ability to identify the potential of young talented employees. Another opportunity of talent management is that it helps foster a strong corporate culture. A strong corporate culture enhances the productivity of a firm. A threat of talent management is that companies may spend money and resources developing talent to have those employees leave the company for the competition. A second threat of the implementation of a talent management is potential for interpersonal conflict. A talent management plan can create internal competition between the staff. Sullivan, J. (2004). Talent Management Defined: Is It a Buzzword or a Major Breakthrough? Retrieved March 8, 2013 from

The Psychological Effects of Law Enforcement Behavioral Modification Essay

The Psychological Effects of Law Enforcement Behavioral Modification Programs for Juveniles - Essay Example Study suggests that the child’s self-esteem may be damaged in the detention setting, where they are subject to strip searches, institutional clothing, and dictated routines (McShane & Williams, 2003). Research has demonstrated that properly implemented alternatives to detention are considerably less costly than secure confinement and youths placed in alternatives make their offenses while they are living at home (or in the community) awaiting the final disposition of their cases. In fact, well-designed alternatives can actually reduce failures to appear and pretrial crimes, because youth involved in these programs are in greater contact with court personnel in the pre-adjudication period (Krisberg, 2005). In February 2010, Hook featured the R.E.A.D.Y. program, inclusive of some of the stories that the team experienced in the sessions. In Hook’s (2010) article, the different activities done inside the jail were also carried out and the program officers showed toughness and strictness. Most of the parents intentionally brought in their misbehaving children, hoping for some changes, and based on the number of teens that were brought in, only 1.1% of them were truly arrested. Given the relatively sensitive issue of juveniles being sent to real jail, and the possible negative psychological damages that may be brought about by some legislations it is undeniable then, that alternative behavioral programs like the R.E.A.D.Y program be implemented and assessed soundly to prevent the youth from committing any crime. Moreover, it is imperative that the communities to which the adolescents belong to provide a healthy environment that nurtures a positive behavior through assisting those who enter into the program to make better choices, consequently deterring negative behavior. The US Department of Health and Human Services [USDHHS] (2008) estimated in 2006 that more than 900,000 children were either

What the Popes could have done differently to avoid the reformation Term Paper

What the Popes could have done differently to avoid the reformation - Term Paper Example Europe ultimately separated into two: The Protestant in the north and the Catholic in the south (Saint-Clair, 7). The Protestant renovation was a Christian progress that took place in Europe in the 16th century. This reformation rooted out of antagonism to apparent illegal behavior and corruption inside the Roman Catholic Church. The reformation is generally alleged to have begun in 1517. Martin Luther posted his 95 Theses on the door of Castle Church in this year, which had the truth that shook the world and drastically renewed the church of Christ (Engelsma, 3). Historians argue that the Protestant Reformation ended in 1648 with the Treaty of Westphalia. The treaty ended the blood-spattered war of the Reformation period. In western history, the Reformation is considered as one of the most significant events. This is due to its radical switchover of thoughts and political reformation (Brady, 1). Luthers discrepancy with the principles of the Roman Catholic Church set out a series of proceedings that in a few decades shattered Germanys religious harmony. Luther is considered as the inventor of the Protestant Reformation due to the influence of his thoughts and the vast authority of his writings. Among many who were appalled by unconvinced mechanistic religious services and widespread church dishonesty, Luther speedily acquired a huge fraction of them. Many who followed him were lured by his argument that religion must be simplified into a secure connection of human beings with God, devoid of the broad intercession of the Roman Catholic Church and its accumulation of custom (Snell, 3). Luther did not aim to establish the Reformation when he posted his 95 Theses on the door of the church. He had no plan whatsoever of disjointing from the church whose head was the Pope and whose head office was Rome. His intention with the Theses was the modification of certain behaviors and the teachings that fashioned

Can Poor Students be Creative with Limited Resources?

Can Poor Students be Creative with Limited Resources? Can poor students be creative and successful on limited financial resources? Author:  Ernesto Mateo Quizhpe M. Abstract When you read this draft notice content about how the need influences for the development of creativity, even of intelligence. Do the students are capable of performing technology in a very creative way? Do you need to have the money or the support of materials? The reason that has developed this project is to respond to these questions the methods used for the development are by means of web pages, appointments to books, use of articles. In addition one of the primary objectives is to demonstrate the usefulness of the creativity in difficult situations for the people. History has not shown that anything is possible in any place, man has always been able to adapt. The greatest example and most famous is the city of Egypt, as in a desert place and airy managed to build a great empire. Egyptians were able to build an architectural wonders only based on the experience of their ancestors and the mathematics that they left them. Also, Japan is one of the fastest achievements because after so much devastation and many rubble managed to rebuild cities and towns, improved their economy as never before. Is justified and argues why education does not help the creativity, is more appeases. But there are other solutions that is using the educational systems of Finland, considered the best in the world. And taking as an example to the young William that from small began to create your electrical mill, it is clear that every human being can perform thousands of thing without having to wait for a financial support. And, the case more surprising is the Mayan who using only their basic knowledge to transform their sedentary lifestyle to something functional, to perform their own prostheses robotics. Can poor students be creative and successful on limited financial resources? Capitulate I; introduction Men who are accustomed to worry about the needs of machines, become insensible to the needs of men.-Isaac Asimov When read the article, it has the results obtained after conducting qualitative research. It demonstrate that it is possible to make inventions with scarce materials. As other objectives is to learn that different things made poor people, without any economic support, to create things that help society. People have all wondered, how is it possible that there are people who without having gotten so far? Some would say that it was because they were born as geniuses or with extraordinary ability but nevertheless had no support, as the case of the electro mill made by Mr. Kamkwamba, which we will discuss in the essay. The whole system that governs us is structured so that we are workers instead of creating new inventions, have convinced all students that you need large sums of money to do great things It is for this reason that the subject is directed to the study of the people who were able to realize technologies or objects in an economic situation of poverty. The theme is addressed to all the people who consider it necessary to have a large amount of income to invent just one thing. When creativity comes out of nowhere, society only needs a brush and a canvas to create a work of art. But they will wonder: how is it possible that of a simple need we could generate so many solutions? The society of consumption has generated deep cultural changes, which have emptied of content, terms and concepts, which previously were of easy handling for the common one of the men. In effect, after the Second World war the image of the man suffered a symbolic mutation, and the majority of the human beings was tur ned into the needy man (Ivà ¡n Illich). In this category there were included, to less, two third parts of the inhabitants of the Earth. This way, we accept that our condition humanizes defined out by the dependency on goods and services; dependency to which we call need. Said otherwise, we subordinate ourselves to the economy and technology that we ourselves have created and developed. Indeed, poor students can be creative and successful on limited financial resources, because first, out of necessity, man`s creative abilities tend to increase; second, from the beginning of man`s existence, humans have been creating objects with limited resources; and third, there are many cases of modern devices created with limited materials. Capitulate II; body First of all, students from schools with few resources or of poor households are capable to be very creative and successful with the resources they have at their disposal. That is why this research mentions a very exceptional case, which appeared in the newspapers of Malawian in 2006. It is about a young man called William Kamkwamba, he is a prodigy exceptional since built a windmill to feed a small electrical network in a villa of Malawi with 60 families. In Malawi there is a lot of poverty and its economy is in decline, the only way in which remains is by tobacco, which depends greatly on its progress. William tells us about its history. His family is composed of 20 people, is a family very extensive. Mention that it was able to get to school because their parents did not have the money to pay for the studies. Something that was called the most attention was the wind that makes in Malawi and began to investigate about the wind energy. His first book was using energy, this part is interesting, since the book does not have instructions on how to assemble a mill electric, is more a book with pictures of windmills or engines of water, but nothing to say how to make them. Therefore, William only based on the images attempt to build your own mill electrical energy generator, the first had only a mill with three blades but later added another in the top so that the power is more stable. See (graphic 1). Andrew Carnegie says: Capitalism is turning luxuries into needs this is curiosity sentence, because no one speaks of the reality of the planet, as the system that governs us has made some people stopped thinking about what others need taking all the resources for them. This is how William helped families from the village of Malawi, since they had the habit of going to sleep at the time that the sun. But now can continue with its activities in the night which has helped to develop faster and keep growing as villa. This brief summary of the history of William Kamkwamba, is an example of the capabilities of human beings, and demonstrated that there is no need for a large amount of resource to make something of great utility. Always be ready to fulfill a need that is what makes us more able to solve problems and more skilled to create new problems, something ironic. But the most important thing is that the young William took their time and effort to help other people without requiring your help much less financial support. Secondly, there are some examples of the way in which the human being with the needs that has been having you have served to evolve. A great author in his book the chance and necessity mentions: The livelihood of scientific objectivity from a structural order in the molecular dimension of the genetic code, but at the same time is not subtracted to a world conventionally accepted as human creation and effect of the development of the pre-training specifies the man, the symbolic language, a unique event in the life, which opens the way to other developments, creator of a new kingdom, culture, ideas, knowledge. It adds, however, that this power of symbolize articulated has been able to rely on modifications neuromotor . (Monod pag. 142). A phrase very beautiful although a little complicated to understand. In short words he refers to as the needs that have taken our ancestors we have shared with us. This defends it by saying that, the DNA of each cell transmit to us the memories, knowledge, experiences that have lived our ancestors. But what in fact allowed them to evolve and we have shared with us, was to find a need in each place that were without having a single job object. An example, very well known, is the ancient Egypt. The first settlers escaping from the Sahara desert, travelled to the River Nile and was established as Egypt in the year 3100 B.C. They were the creators of great technologies that are well known today, among them are: glass, papyrus, woven, fabrics of flax, needles and mirrors of copper, wooden boats, oil lamps. Egyptians created from each need submitted to them, as the thread that needed to join fabrics for the most effective transport of food; or the transport in times of drought, needed the maritime trade to procure food. Either, Japan after the Second World War made it to grow its economy in a very fast way. Once you have finished the Second World War, Japan was destroyed by bombs loops in Hiroshima and Nagasaki. There was a lot of poverty and death by starvation, as they did not have a way to distribute resources to those who were affected by the war. See (graphic 2). There is a very interesting history since, a small number of inhabitants on the outskirts of the two cities destroyed joined together to rebuild the forgotten that Toyota would for the war had been declared in bankruptcy. With few resources the Toyota brand reappeared and is gaining increasing importance as a producer of vehicles in Japan. Later, at the end of the years 50, the brand begins to make their orders in foreign markets. Thus, using parts of abandoned cars and tank that were in the cities contracted carts in mass. See (graphic 3) Japans economy is fired by what other brands began to produce cars in the same way and were created brands like Suzuki, Honda, and Mazda. In this way Japan came out of the economic crisis that was happening. Thus, history teaches us, it is possible to reestablish itself after a disaster or to lack of resources. And it is very effective at the time of evolution as we mentioned Monod. In added, there is much evidence that the brain of the child and adolescent functions in a manner very different from that of the adults, for example, they think much faster and are much more creative. As in the case of William Kamkwamba there are many cases of young talented that did great things without many goods. A recent case almost that became very popular Wayan Sumardana also known as the Iron Man of Indonesia. A father of a family had a stroke which immobilized all if right arm and difficult the form of work in its mechanics. Trying to find a solution to this problem, because he had to feed his wife and three children, he looking for a way to settle its paralysis left. He was a graduate of the college as mechanical only but never continued studies at the university, and with their basic knowledge of robotics decided to assemble their own mechanical arm. With Internet and something of scrap that he had in his workshop armor several prototypes that served as a test and after several attempts to do an arm that moves with just thinking about it. These cases are great examples of needs to the limit, and shows what you are capable of a lot of people only in situations of need. Here the young Wayan, made this arm bionic because I needed it and regardless of the money, the time or the lack of education or knowledge which it had, it was proposed to make the arm, because it was essential for their survival. See (graphic 4). It all depends on the perspective, from the point of view of students, is a matter of changing the way of teaching. It is proven that the schools restrict much the creativity of the students. But this is already changing and a clear example is in Finland. There students have the freedom to do what they like from small and are not limited with difficult subjects that they do not like it, and are not busy all the time in fact have only four hours of classes. This, according to Finland helps to relax the students and makes flow better new ideas. Education in Finland is considered the best in the whole world. The writer Monod said that creativity arises when the comfort disappears and the art of the need governs us. Students with a lack of extreme resource are the most creative, because they have already gone, to force, by situations in which needed to use all your brain to solve problems of life or death. The only limitation of the people without resources is the not wanting to do spectacular things. We already know several examples of people who took decision and initiative, not limited by the lack of resource. Capitulate III; conclusion. For ending, to respond to the initial question, if it is possible to create great technologies with few resources to change the world. People are able to increase their creative capacity becoming challenges daily, or looking for a goal. It is better when the goal set by a person is aimed at helping someone else as is the case of William, because there is a commitment to the other. In some cases it is difficult to find a need that is need to fulfill, this is due to the fact that we are very happy with what we have. Students are like an airplanes, with the appropriate momentum can reach rise very high. History has taught us that crossed the times we have been in wars and conflicts. But always depended on each civilization so that it can emerge from the rubble. It is not always necessary to a support on the part of a government to the state on exit, is one of the principles of Marxism. Schools, colleges and universities help students as a guide to know by where follow the path to innovation. But at the same time they removed all the ability to be independent and think for themselves. The educational system in Finland is the most effective because it breaks with this scheme to limit students to do things that are need. As personal opinion, it is possible to make all the people of the world to express all their creativity and generate new technologies that help the world without the need to ask for large amounts of money. Has been checked with several cases as some staff have made changes without help. Attachments Graphic 1: William Kamkwamba on Graphic 2: Tissue line by Egyptians his windmill Graphic 3: Hiroshima after bombs attacks Graphic 4: Wayan Sumardana improve in 1945 his bionic arm Keywords Marxism: the political, economic, and social principles and policies advocated by Marx; especially : a theory and practice of socialism including the labor theory of value, dialectical materialism, the class struggle, and dictatorship of the proletariat until the establishment of a classless society. Papyrus: Is a widely available typographic font designed by Chris Costello, a graphic designer, illustrator and web designer. References: BBC. (2016). Ive been obsessed with machines since I was a child. December 18, 2016, de BBC Sitio web: http://www.bbc.com/news/world-asia-35409754 Hà ­ades Galà ¡n. (2014). Capitulate VIII. En Los pobres de mi tierra: Conciencia social (pag. 67). Colombia: Universal global de ediciones. Jacques Monod. (1971). En El azar y la necesidad (pag. 19). Francie: Les Éditions du Seuil. Sarah Childress. (2007). A Young Tinkerer Builds a Windmill, Electrifying a Nation. December 17, 2016, de newss Malawi website: http://www.wsj.com/articles/SB119742696302722641 http://www.wordreference.com/

Internet Disaster :: Impact Technology Cause Effect Papers

Internet Disaster The normal developmental process of a teenager is built upon a mastery of their bodies, their minds, and their environment. This process known as adolescence is essential to the development of a healthy sense of self, and the ability to successfully interact with themselves and their environment. In this paper I will examine the lives of 2 teenagers who substituted some of the traditional roles of adolescence with computers and the Internet as their primary link to the world, with disastrous results. A computer is just a tool. When software is loaded, the computer performs a task. There is nothing particularly remarkable about this. A solitary computer while individually powerful has very little interaction with anyone beside its primary user. It is only when a computer is connected to the Internet does it truly appeal to a teenager. Once connected to the Internet the computer enables a teenager to take advantage of all the myriad communication outlets available. These outlets cover a huge variety of interests and technical implementations from MMORPG (Massively Multiplayer On-Line Role Playing Games) to simpler chat systems like IRC (Internet Relay Chat) and MUDS/MOO (Multi User Dungeon/MUD Object Oriented) to AOL’s family of real-time chat systems (Instant Messenger, ICQ). Besides these fairly well known applications, there are dozens of other software applications designed to permit users to communicate in almost any conceivable technical manner in almost any com bination of race, age, gender or era. It is by using this infinite variety of possibilities that a teenager can substitute the normal process of adolescence A computer, like a teenager, needs to learn how to perform a task. In a computer, the process of learning is called programming. In a teenager the process is called socialization. A computer is programmed by creating a series of machine language instructions that are executed by the computer’s microprocessor. Normally, however a computer is programmed through the use of a high level language such as C, or C++. This high level language abstracts the internal hardware of the machine such that the learning curve is easier to surmount. Another piece of software called the compiler accepts inputs from a high level language and outputs machine language code ready to be run. A teenager is programmed by their interactions with themselves, their peers and their own environment.

A Research Proposal on the Perceptions of 12th Grade Students

For a significant number of years, Nigeria has been facing alarming forms of malpractices that is being perpetuated in the conduct of examinations at almost all levels of its educational institutions. In effect of this, credibility in certification exams has been declining significantly.According to Fagbemi (1998) government functionalities, school authorities, invigilators, examiners, parents and students are all seen to be perpetrators of such a malpractice (p.13).In effect of this, examination malpractice in the country have paved the way for a significant percentage of the Nigerian population, most especially among the sophisticated part of the social strata to question papers from examination bodies or bank officials wherein question papers have been provided to them for safe keeping (Balogun 1999, p. 110).The act of education malpractice in Nigeria becomes more complicated as some parents were reportedly purchasing question papers from examination bodies or bank officials. Othe r than this, multiple registrations of candidates are also seen; and these incidences go as far as female examinees inserting their pictures in their examination scripts with self-addressed envelopes, implying a willing invitation from examiners (Ene and Ursula, 1998, p. 15-18).Syndicates have also been capitalizing in the practice as there have been special centers which are reported to write the examination for candidates themselves through coordination of various officials from exam bodies’ with the help of corrupt school administrators.Some students also pay huge amounts of money to school administrators and examination officers just to allow them cheat in the examination hall (Fagbemi, 1998, p.16).A number of private schools as well have been reported to sponsor examination malpractice in order to attain a high percentage pass at credit level exams such as the Nigerian Senior Secondary School Examination (SSCE) and Junior School certificate Examination (JSCE) (Balogun 19 99, p.111).In effect of these malpractices the Joint Admissions and Matriculation Board (JAMB) introduced a number of changes in the question numerations varying for every candidate, which in effect turned out to low examination results within the University Matriculation Examination (UME); albeit, another turn-around was devised by syndicates, hence paving the way for the JAMB examination to be unreliable as well (Fagbemi, 1998, p. 14).Examination malpractice in the country has already reached a significant percentage.For instance, the University of Abuja already had 41 out of 44 students expelled in September of last year due to examination offenses. In 2007 as well, 232 individuals were already blacklisted due to their participation for the leakage in the exam that was organized by National Examination Council (NECO), West African Examinations Council (WAEC) Joint Admissions and Matriculation Board (JAMB), National Business and Technical Education Board (NABTEB) and National Teac hers Institute (NTI).These individuals were school principals, supervisors, invigilators and examiners (Balogun 1999, p.12). In the same year on the month of February, the federal government of Nigeria had announced that 324 schools were already closed and would no longer serve as centers for public examinations due to documented incidence of malpractice as well (Ene and Ursula, 1998, p. 20).Purpose of the ResearchThe purpose of the research is to provide detailed information as to the malpractice of Nigerian educators, students, government officials and parents that paved the way for the perpetration of cheating within national certification exams; and at the same time provide alternatives based on the principles of effective educational leadership in order to improve the disposition of educational institutions in Nigeria.The study will be focusing on the inconsistencies of government policies that paved the way to the difficulty of implementing a sound program promoting honesty am ong certification exams. The study will also be focusing on both internal and external factors that cause malpractice.For instance, the issue of the non-implementation of educational policies for educators that supposedly can bring higher morale among educators and consequently financial stability that would somehow lessen their inclination to be bribed or conduct various malpractices in exams will be discussed.The lack of employee motivation and weak accountability for educational leadership will be discussed, while external factors such as teacher shortages and corruption will also be presented (Sachs, et.al., 2004, p. 11-12).The decline of morale of educators, the continuous brain drain phenomenon in the country or the flight of talented Nigerians to other countries, the role of poverty, the ill-equipped libraries, violence, cultism, and the explosion of student enrolment will also be presented.Forms of examination malpractices will be presented as well; together with the individ uals that are often involved such as parents, teachers, students, government officials and institutions (Aina, 1993; Bunza, 1993).After all of these factors are expounded, the role of educational leadership such as transformative education will be presented (Obikeze, 2003). The research will show that through the role of transformative education or a process of remolding or reconfiguration of the existing state of affairs, the educational paradigm of Nigeria will be changed.In addition, the study will also present the role of refocusing and re-energizing of the institutional framework of education that will pave the way for more competitive educators, intelligent, honest and competitive students, honest and government and non-government institutions, together with the students' respective families (Obikeze, 2003).For the purpose of this research, the study will also be elaborating of Nwagwu's (1998) critical areas of reform in secondary education such as quality of primary school te achers relative to the student ratio; the secondary school curriculum, together with the facilities and materials that are being used.Time utilization and management of the aforementioned, backed with discipline and character formation among students, and finally other material factors that could help in improving the learning dynamics of students such as boarding houses, recreational facilities and various type of scholarships and arrangements (Nwagwu, 1998, pp.10-21).  The role of decentralization is also vital in terms of educational development and will be presented in the research as part of educational leadership theoretical background.Decentralization will pave the way for the privatization of state-run activities that will involve the use of performance assessments and results-based management as a means to exert state influence while still allowing various areas vital for decision making (UNESCO, 2006).   

The Global Financial Crisis and the Imf

Table of Contents 1. 0 Objectives2 2. 0 Introduction2 3. 0 Types of Financial Crisis2 3. 0. 1 Banking Crisis2 3. 0. 2 Speculative Bubble3 3. 0. 3 International Crisis3 4. 0 Causes of the Financial Crisis 2007-20083 4. 0. 1 Loose Monetary Policy. 3 4. 0. 2 Global Imbalances. 4 4. 0. 3 Credit Boom. 5 4. 0. 4 Asset Bubble. 5 4. 0. 5 Financial Innovation5 5. 0 Impact of Financial Crisis6 5. 0. 1 Impact to U. S Financial System. 6 5. 0. 2 Economic Growth Rates. 6 5. 0. 3 Personal Finances of US Citizens. 7 5. 0. 4 High Unemployment Rate. 5. 0. 5 Impact on the IMF9 6. 0 Policy Response9 6. 0. 1 Term Auction Facility (TAF). 9 6. 0. 2 Economic Stimulus Act 2008. 10 6. 0. 3 Initial Cuts in Interest Rate. 11 7. 0 IMF Response to the Crisis12 8. 0 Conclusion14 9. 0 References15 1. 0 Objectives Objective of this topic is to giving a scope about the recent global financial crisis 2007 which discussing about the causes and impacts of the crisis and focusing mainly in the United States. Then, it wi ll focus on the policy response of the country towards the crisis.Role of the International Monetary Fund (IMF) is also given attention to understand how it works as the ‘international lender of last resort’. 2. 0 Introduction Financial institutions which play an important role in the economy, act as intermediaries between borrowers and lenders. Channelling of funds to individuals or firm that have bright investment opportunities takes place in the financial markets. Without financial intermediaries, it is difficult for companies to operate business. The economy also cannot operate efficiently if the financial system does not perform the role well.Systematic risk is a risk that could be failures of financial institution that freezing up capital market and eventually reduces the supply of capital to the economy. The United States experienced this systematic failure during 2007 and continues to struggle its consequences until 2009. Financial crisis occur when an economic encounter recession or depression caused by lack of liquidity in financial institution. In this circumstances, financial institutions lose huge part of their value. Financial crisis is not the same as economic crisis which affect the entire economy.A financial crisis can occur in a single sector and not always affect other sectors. The causes of financial crisis are different with the type of crisis. The financial crisis 2007-2008 started in August 2007 as a subprime mortgage crisis concentrated in the United States. The crisis became global but originally started in the financial sector of the United States and soon became global economic crisis. Mostly economies in the world were affected by this crisis because the United States economy can be thought as powerful economy in the world. 3. 0 Types of Financial Crisis . 0. 1 Banking Crisis Banks normally function by providing deposit accounts to people who want to make savings and it can be withdraw anytime. The banks then use these deposits to make loans and charge interest to borrower which are paid over a long period of time. If all the depositors want to withdraw money at one time, the banks will face lack of cash flow and will be bankrupt. This situation is called banking crisis. 3. 0. 2 Speculative Bubble Some people buy stock by speculating the price, hoping that price of the stock will increase in the future.Therefore, if most investor buy stock speculatively, chances that the stock price will increase are be very high. When all the investors want to sell at the same time, then the price will likely to fall. When price of a stock is more than its current price plus dividends and interest, then the stock is said to show a bubble. 3. 0. 3 International Crisis This crisis occurs when a country is forced to devalue its currency. This can happen either because of speculative attack or a country is default in paying its debt. When this occurs, all countries that were trading with this country will be affected .Investors also will lose the value of their investment because the currency has been devalued to lower rate. 4. 0 Causes of the Financial Crisis 2007-2008 4. 0. 1 Loose Monetary Policy. Monetary policy implemented by the Federal Reserve plays an important role in determining the interest rate. It is believed that loose or weak monetary policy implemented by the U. S Federal Reserve is among the cause to the crisis. After the internet or dotcom bubble in 2000, loose monetary policy is applied by the U. S Federal Reserve. The federal funds rate dropped from 5. 8% in January 2001 to 1. 73% in January 2002 and remained low for several years as shown in chart 1. This policy thus encourage U. S consumption, reduced savings and created high current account deficit. The Federal Reserve had made mistake by its decision to keep the federal funds rate too low for too long. The policy therefore responsible for creating the credit boom and housing bubble. In other words, with a low federal fund s target, banks take advantage on cheap funding and made cheap loans available. From year 2000 to 2006, total debt outstanding for the U.S has increased by $13. 5 trillion. The debt to GDP ratio is increased to 350%. This high level of debt made firms and households more exposed to adverse economic shock. Other than that, the Federal Reserve and regulators made mistake in the failure to control the poor underwriting standards in the mortgage markets. The poor underwriting practices can be seen through no down payments, no verification of income, asset and occupation by borrowers. Credit that was widely available suggested poorer loan quality. Chart 1: Loose monetary policy Source: Adapted from The EconomistChart 1 shows that the actual interest rate fell below the Taylor rule, that is the interest rate what historical experience suggest policy should be adapted. The line slopped downward to 1 percent in 2003 to 2004 and then rises until 2006. The Taylor rule line shows what interest rate would have be if the Fed followed the policy that worked well since the early 1980. 4. 0. 2 Global Imbalances. The recent financial crisis happens when there is much liquidity in world capital markets. It is due to the large payment imbalances between the main countries and regions in the world economy.Global imbalances occur when there is huge and continuing current account deficit in the United States. The current account deficit is financed by plenty of flows of capital from emerging and oil exporting countries. As the consequences, the global imbalances encourage financial activity that would not be effective in long time without the development of deep global financial markets. High levels of global liquidity happens when countries such as China built up current account surpluses and foreign exchange reserves, maintaining artificially low exchange rates and a positive saving investment balance.Because of this liquidity level, global real interest rates fell which contribu ted to credit expansion and rising asset prices that drives to the crisis. 4. 0. 3 Credit Boom. Credit boom happens when banks and mortgage brokers encouraged mortgage sales because they earned fees in proportion to the volume of mortgages they wrote. Banks earned large fees by securitizing mortgages, selling them to capital markets in forms of mortgage backed securities (MBS) and collateral debt obligations (CDO). Since banks distributed these mortgages to capital markets as asset backed securities, it has low risk upon the process.Compared to corporate bonds that had low interest rate during the time, these complex and risky products is highly demanded by institutional investors such as hedge fund and insurance companies. Mortgage sales expanded even to those who could not afford them as the banks only focused on earned large fees. When the housing price bubble evaporated or interest rates rose it turned out to be large defaults. Home sales peaked in late 2005 meanwhile home const ruction spending and housing prices decline in early 2006. When the subprime mortgage crisis started in 2007, the entire market began to collapse.The crisis began in the United States, but because the mortgage based financial products has been spread around the world it soon became global financial crisis. 4. 0. 4 Asset Bubble. Another factor to the financial crisis is an asset bubble that leads to unsustainable leverage. Before the start of the crisis, the U. S government implemented a public policy that encourages homeownership. Because of low interest rate, it has led to mortgage lending and households were encouraged by the banks to borrow causing asset (house) price to increase.The borrowing is allowed up to the full value of their property with little regard to their ability to service the debt. Borrowing is encouraged because of the low interest rate made by monetary policy makers. The demand for housing is related to money market interest rates. Thus, the accommodative polic y conducted by the Federal Reserve contributed to the build up of housing demand and asset prices. The term sub-prime mortgage come when lending activities is also approved to people who did not meet the credit requirements that may default to payments. 4. 0. 5 Financial Innovation.Usually, banks and other agents innovate to avoid regulation and boost returns by taking greater risks. When asset prices increase more rapidly, innovation also accelerates as expected gains grow larger. The main innovation is the process of securitization. This complex ‘securitized’ pools of loans promising high returns with low risk. Thus, in the United States, ballooning mortgage loans to riskier borrowers provided the basis for an ever-larger inverted pyramid of structured products. As the housing prices increasing, lenders provide mortgage lending easily.However the mortgage were securitised, that is repackaged and sold as financial instruments to investors for immediate cash. This led t o excessive and irresponsible mortgage lending. The institutions that originated the mortgages such as commercial banks, savings and loans eventually did not holding the mortgages because it has been sold to investors by the investment banks. This innovation has caused massive distortions in incentives and risk management in the financial organizations. It was an instrumental in strengthen the increase in leverage.Starting in 2003, banks involve rapidly in financing activities, investments and hedging operations that hard to assess risks. When asset prices began to fall, financial organization brought down together and spread panic among investors worldwide. This development has caused massive distortions in incentives and risk management arrangements within financial organizations. 5. 0 Impact of Financial Crisis 5. 0. 1 Impact to U. S Financial System. The U. S government has closed 22 banks including Lehman Brothers, Washington Mutual and Indymac.Other than that, it has rescued F reddie Mac, Fannie Mae, Bear Stearns and created a bailout fund around $700 billion to purchase stakes in effected banks. This step is taken in order to restore confidence in the financial markets. However, this $700 billion Troubled Asset Relief Programme (TARP) failed to restore market confidence. Nearly $8. 5 trillion or around 60% of its gross domestic product has been committed by the U. S government to prevent the collapse of its financial system. 5. 0. 2 Economic Growth Rates. The effect of 2007 crisis can be seen clearly on the downturn economic growth globally.As shown in Figure 1, countries in the world are experiencing a downturn in economic activity as the effect of financial crisis. These declines in economic activity have been followed by losses of trillions of dollars in equity markets and a credit squeeze that are affecting households and businesses worldwide. Financing activities such as world trade and oil exploration has been slow during the time of crisis. As sho wn in chart 2 below, real growth rate measured by GDP across the world has been decreased. Real growth rate in reported by the World Bank is 3. 9% in 2007 dropped to 1. 3% in 2008.As the crisis became worsen, economic growth dropped much lower rate to -2. 2% in 2009. The U. S economy has a large proportion in world economy therefore it has slightly similar trend in the growth rate. The U. S real growth rate in 2007 is 1. 9% dropped to -0. 4% and -3. 5% in 2008 and 2009 respectively. Chart 2: GDP – real growth rate (%) Source: Adapted from World Bank data 5. 0. 3 Personal Finances of US Citizens. People have struggled to repay their debts as the direct consequences of the financial practices that produced the crisis. The value of house dropped dramatically for individuals who owned house before the crisis broke out.This caused some people repaying mortgages that are worth more than the current value of their house. Eventually, many people ended up losing the house that they bo ught in years before the crisis broke out. There were high rates of foreclosure in some area of the United States as borrowers cannot repay the loans. Other than that, individuals in the US also suffered from the loss of growth and income that their savings and investments would have produced. This is because interest rates for savings have dropped sharply. Investors and companies experiencing losses as the stock in many companies dropping rapidly.Retirement plans that are usually based on mutual funds and performance of the stock market results not as they had planned as the stock market crashed. They may need to work longer or retirement plans is less than expected before. Moreover, it has become more difficult to borrow money. While expensive loan services have been expanded, people find it hard to obtain low cost loans or credit cards. 5. 0. 4 High Unemployment Rate. The US gross domestic product which is the total amount of goods and services produced by the country was reduced as the effect of the crisis.Companies in the country struggled to cope with the crisis, however lots of people have lost their jobs. Based on chart 3, the uneployment rate grew from 4. 7% in 2006 to 10% in 2010 which was the highest rate in the last few decades. In addition to lose income, unemployment made it worse for many people because it has become difficult to find new job. Many companies are not willing to hire new employer and even a fresh graduates have to compete to find employment. This become a serious problem for many young citizens in the country. Chart 3: Unemployment rate in the US Source:Adapted from U.S. Bureau of Labor Statistics 5. 0. 5 Impact on the IMF The damage caused by the financial crisis is a challenge for the IMF. This is because, its financial resource is not in line with the global economy over the past decade. The United States and other advanced industrial economies are at the center of the crisis. However, the IMF would not have enough resources to provide financial assistance if these countries seek for help. Therefore, the IMF resources need to be increase or the risk would become worse in the future. 6. 0 Policy Response 6. 0. 1 Term Auction Facility (TAF).The Term Auction Facility is introduced in December 2007 so that banks can borrow from the Fed easily. Thus the banks can bid directly for funds from the Fed. This is because investors are not willing to lend when afraid about the condition of many financial institutions affected by the crisis. Consequently bank funding markets were put under severe pressure. The main objective of the TAF was to reduce the spreads in the money markets and in that way increase the flow of credit and lower interest rates. As a result, the TAF helped by encouraging the distribution of liquidity when bank funding markets were under stress.The spread between the London interbank offered rate (Libor) and the overnight indexed swap (OIS) for loans of one-month maturity or longer increased to un usually high levels in the late 2007. It is believed that the increase in the Libor–OIS spread is caused by the heightened risk perceived by investors at the time. Since Libor affects interest rates on a wide variety of loans and securities (for example, home mortgages and corporate loans), the sudden spike in the spread was disruptive to the debt market and negatively affected the economy.The chart 4 and the table below also showed six announcements related to the TAF program. Chart 4: The TAF facility provided term funding through periodic auctions to eligible depository institutions. By providing term funds to banks at regularly scheduled auctions, the TAF may have assured lenders of continued access to future funding and thereby reduced their uncertainty regarding anticipated funding needs. The TAF was a facility designed by the Federal Reserve during the crisis to improve liquidity conditions in various asset markets that is crucial to improve short term funding market. . 0. 2 Economic Stimulus Act 2008. The Economic Stimulus Act 2008 is a response made by the government through several package totalling over $100 billion to individuals and families in the United States. The economic stimulus is designed to boost the U. S economy and prevent further recession. In this programme, the government provide tax rebates to low and middle income taxpayers and tax incentives to stimulate business investment. The purpose of the incentives is that the people will have more money to spend thus increase consumption and the economy.By doing so, the government would expect that it will recover the economy. However it is not as hoped because they spend little although the incentives were given. This can be shown through chart 5. The top line shows personal disposable income increased at the time of rebate. However, the lower line shows consumption did not increase as expected. Chart 5: Increase in income 6. 0. 3 Initial Cuts in Interest Rate. The third policy resp onse to the crisis is sharp reduction in the federal funds rate. When the crisis began in August 2007, the rate was 5. 25% and went down to 2% in April 2008 due to the cut.The lower interest rate then reduced the size of adjustable rate mortgage that was cause of the crisis. The most significant effect of this response is the depreciation of dollar and rise in oil price. In the early 2008, oil price increased almost two fold from $70 per barrel in 2007 to over $140 per barrel. High oil price hit the economy as gasoline price increased dramatically and automobile sales plunged. On the other side, the policy reduction in the federal funds rate that cuts interest rate helped raise oil and other commodity prices thus prolonged the crisis. Exchange rate also has influence to the rise of oil price.As shown in chart 6, reduction of the federal funds rate at top line in July 2007 drives the oil price at the bottom line upward until July 2008. Chart 6: Cut in interest rate and increase in oi l price 7. 0 IMF Response to the Crisis The main role of the IMF is to identify the risks that threaten global economic and financial stability and to develop policy responses. The IMF has a worldwide membership and its mandate is to promote economic and financial stability. It is has been provide forum for discussion of international economic issues and help to reach solution on policy responses.In response to the financial crisis, the IMF boosted their lending to developing countries to help them cope with the crisis and to sustain the economic recovery. To meet ever increasing financing needs of countries hit by the global financial crisis and help strengthen global economic and financial stability, the Fund has greatly expanding its lending capacity since the start of the global crisis. It has done so both by obtaining commitments to increase quota subscriptions of member countries and securing large temporary borrowing agreements from member countries, including recent pledges of $456 billion.Countries affected by the crisis can borrow funds from the IMF. Other than that, there is also debate about reforming the IMF. The reformation issues focus on the need to balance the traditional functions of providing short-term financial assistance and promoting external balance stability in member countries. To achieve the objective, there is a need for a wider responsibility of crisis prevention, supporting financially for countries that, although not suffering actual reserve shortage, are in danger of external shocks and liquidity runs. This measure would prevent more severe impact to member countries as the effect of financial crisis.Since year 2008, the Fund has introduced effective instruments to prevent sudden falls in investors’ trust and the eruption of liquidity crises. As a result, borrowers were able to cope with the global crisis, avoiding large scale banking crises and disruptive exchange rate movements and protecting social spending. To prevent the crisis, the IMF has lending arrangements signed by the IMF and low and middle-income countries during the crisis. These lending arrangements take part from January 2008 and June 2010. The size of the loan arranged by the IMF is larger for country that is more exposed to the crisis especially for large country.As a result this measure can prevent more severe contagion of the crisis to other countries. 8. 0 Conclusion The U. S. economy has suffered a few major shocks in recent years during the crisis. At the start, these shocks include a large declining in house prices and a spike in the prices of oil and other commodities. The decline in house prices reduced the value of mortgage backed securities. Because of leverage, this threatened the ability of many of financial institutions, including major investment banks. These shocks have combined to put the U. S. conomy and many economies throughout the world into a global financial crisis and a deep recession. It is likely the worse since the Great Depression in 1930sRegulatory failure is a main responsibility for the crisis. It is shown that weak regulatory in the financial system leaving the consumers inadequately protected. To cope with this crisis, the IMF had played an effective role. It has come out with a financial assistance by providing loan arrangements to the member countries. 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